From Bernie to Burt to Irvee. Sesame Street Revisited: Madoff Style

To: The Honorable Burt Lifland
From: The Venerable Irv Picard


Burt:
Just a follow-up to clarify yesterday's filing.

1. The $300,000 line item to pay Lee Richards is old news. You were the one that appointed him as Trustee in the first place, and however coincidental it might be that he was the same Court-appointed Trustee in the '92 case involving Mr. Madoff, I'm confident that the $300,000 he received for his several weeks of work is appropriate.

2. With respect to my fees for the recent 6 months; we invoiced at $210,000 a day and my personal share was a paltry $835,000 for the period. Burt, I spend more than 6 hours a day dealing with everything from kvetchers that can't hear me on the phone when I tell them they should call back in two weeks, to "SIPIC Steve" badgering me to keep the claim payments to a slow crawl, to Chuck Schumer's people asking me to speed up payments for some of his friends.

On top of that, I've got Jamie Dimon's people sending me 10 copies a day of the Fortune Magazine edition with his face on the front, and Larry David's people calling non-stop to sign me up for a guest-starring role. And people are thinking that I'm getting paid too much?! Ha!

Despite what Ken Feinberg might say, I've earned every penny of the 1200 hours that I've billed out for. And, you'll notice that I kept my expenses to just $921.00 for this latest period; of which $125.00 went towards that Sable's nova platter that your office staff had us send over.

Another $160 went towards alcohol-free hand sanitizer for our entire firm--which saved us thousands in sick day pay, and we needed to expense $80 for the purchase of Caoni Chocolate; the people at AlixPartners told me they couldn't decipher the microfiche without it.

The bottom line, Burt, is simple: Our $22 million tab is being paid by SIPC, which is being funded in part by Tim Geithner. Its' not coming from the claimant pool.

On top of which, since I'm being paid by SIPC, my job is to not pay claims, and I'm doing that job. The pool is overflowing; ask any of the people that we keep telling to "call us back in two weeks!" Ask Steve Harbecht, and have him show you the thank you letter from Tim Geithner!

On the collection side, even though we might have agreed to bury under the rug the $250 million issue with JPMorgan, and despite the fact that we might be giving up the Merkin pursuit, we do have a handshake agreement from Jeff Picower for him to send back some money, and we're expecting a real windfall by auctioning off Bernie Madoff's website. The domain name alone is worth thousands, and the ad revenue can deliver even more for the lucky group that buys the site

To summarize; these things take lots of time; thousands, if not tens of thousands of billable hours. So trust me, the $22 million tab for the past six months is a cheap price to pay for what we've accomplished so far. If I were to bet, its only a fraction of what the Justice Dept. has spent for those donuts being delivered to the 17th floor over at the Lipstick Building.

By the way Burt, I know that some guy named George Costanza keeps sending you notes kvetching about me, but he's not getting paid any faster than anyone else, unless Chuck Schumer says so, and unless Steve Harbecht agrees. What with the holiday schedule coming up, and what with Steve going down to Boca for two weeks in December, nobody should expect anything until after the first of the year.

On a completely different note, thanks for pointing me to Madoff's Mixer on Janey Wells's cocktail menu, I could use a strong drink right about now!

Happy Turkey, Burt!

Irv

Bernie's Turkeys

To: Bernie
From: Jodi C.

Thanks for your note. I didn't know that you could be so poetic!
Anyway, and no thanks to you, the Donut Demons are still sitting on 17, and they're forwarding me the fan mail. What are they thinking??

Before I forget; Should I use that special Black Amex in Ruth's name for this year's re-union Christmas party? Mark says his credit card was canceled, and "Randy Andy" can't seem to be able to make a decision, and Peter says he's too busy to make decisions.

Anywho--here's a sampling of what was hand delivered (good thing that I've got some of that Soapopular too!)


To: Brett D.
Got your note.We like to keep our hands clean. Try the hand sanitizer that everyone else is using, its alcohol-free! BTW-The NYSE Surveillance dept still has your hard drive, so the less you rant, the better off you'll be. Regards to the Sonny side.


Fan Mail: from Mrs. P.


The Boston Globe reported yesterday that attorneys for Carl Shapiro filed an objection to the bankruptcy trustee's definition of net equity, arguing that Shapiro thought he was invested in a conservative portfolio of stocks and bonds unlike most of the other Madoff investors whose assets were traded using the more risky split strike conversion strategy.

The attorneys contend that because Shapiro set up a company, Wellesley Management, that tracked his portfolio daily and matched stock values to market prices at the end of every month, Shapiro is entitled to base his claim on his expectation that his profits were real.

Shapiro is under investigation and if Bernie generated customized account statements for Shapiro so he could evade income taxes or for any other purpose, Shapiro won't be entitled to anything other than a long prison sentence.

One transaction the authorities should investigate is a $71 million contribution Carl and Ruth Shapiro made to their foundation in 2007. On Part III of the 2007 990, there is a $31.5 million decrease in retained earnings labeled "Net Asset Adjustment - Difference Between Cost and Fair Market Value of Stocks Donated" that doesn't make any sense.

On 12/31/06, the foundation didn't own any stock. Throughout 2007, the Shapiros contributed stock to the foundation that had a total fair market value of $40 million. The per share price of the individual stocks contributed correlates to the share price listed on Yahoo on the date of the contribution. (See Schedule B - Part II)

During the year, the foundation sold stock that had a cost of $39.8 million for $71.3 million, resulting in a net gain on the sale of assets of $31.5 million. (Part IV)

On 12/31/07, the foundation held $14 million in stock at cost that had a fair market value of $12.8 million.

The $31.5 million adjustment to retained earnings doesn't make any sense because there were no stocks to write down at 12/31/07.

A reconciliation of net cash generated during the year to cash on hand at 12/31/07 shows approximately $31.2 million in cash unaccounted for:

Sources of cash:
Cash on hand at 12/31/06 49.5 million
Cash contribution 31.0 million
Proceeds from interest, dividends 12.4 million
Proceeds from sale of stock 71.3 million
Total cash generated in 2007 $164.2.million

Uses of cash:
Grants, expenses 13.8 million
Purchase of stock 14.0 million
Net investment in treasuries 4.0 million
Other investment .7 million
Total cash used in 2007 $32.5 million

Net cash generated in 2007 $131.7 million

Cash on hand at 12/31/07 $100.5 million

Cash unaccounted for $31.2 million

I doubt very much the Shapiros lost track of $31 million. It looks more like the Shapiros were happy to take credit for a $71 million charitable contribution but kept the $31 million cash piece of it in their own pocket.

Since Paul Konigsberg signed off on the 990 as the tax preparer, maybe someone should ask him where the $31 million went. After all, he's the one who made it disappear

Bernie's Sutton Place Fingerprints

To: Dad
From: Marcia
cc: Peter

Even if I've been "outed" by that bitch-hunter "Mrs. Panstreppon", at least Irv Picard missed out on putting his creepy hands on the apt.

I'm better off now anyway; Sutton Place was getting to be such a bore.

Now that I've cashed out for $1.2 mil, I'm going to buy myself a carload of Caoni, then I'm headed on a vacation.

BTW- Sonja keeps sending me emails asking me what I did with the copies of the canceled checks; but I'm going to wash my hands of the whole thing with my Soapopular; this stuff is great!

Last- I put most of the furniture from the co-op into storage, and the only thing left to auction off is the website.

Dad, since you've always been such a convincing guy, if anyone wants the site, I'll let it go for $5k. Talk about bargains! The damn thing can probably generate $5k a month in ad sales!

Marcia

Bernie Madoff: Friday the 13th Lickin the Lappers

To: Barbara Walters
From: Bernie

Barbie-
Thanks so much for the nomination!

My buddy Jeff Picower is no doubt turning over in his grave right now thinking that he should have been nominated for Time's Person of the Year Award! Ha!

Next:
Its Friday the 13th, and since I'm not really a superstitious kind of guy, why shouldn't I come back after taking a week off?

OK;
1. Frankie--Since I don't remember much, I certainly don't remember telling you to a hire a mick or a spic to do the programming. You were supposed to make sure to have that Russian kid do this stuff! The one that Sonja had recommended to us!

Then, I told you to give them a $600,000 bonus, and you decided to give them a measly $60,000...I told you that this would come back to haunt you!

Sure, maybe these boys only got caught because some Fed on 17 turned over a donut box on 17 last week and found a sign that said "O'Hara and Perez Were Here." Christ..a year goes by, and they finally figured out who had the keys to the printer cartridge closet.

If I was there right now, the place wouldn't be such a pigsty!

Do you see any of my people, the ones that got the right kind of bonuses, blabbing about anything? No, of course not! This is what you never learned from me, Frankie. You have to pay people properly, or otherwise they'll turn on you.

Better they be turning over in their graves, than turning on you! Just ask Jeff Picower! Or just ask Jerry Horowitz!

And Jeff, if you're reading this (What? Everyone should believe that you're not really playing golf with Ken Lay right now?); that was some nice bequest to April! Frankie--are you paying attention? This is how you're supposed to reward people!

Oy.

Next:
Mr. NosePicker--You're sitting on almost $2 billion in cash that's collecting interest, but instead of paying the 85-year old people that thought SIPC would pay off their claims months ago, you're busy selling my cuff links on the street corners?!

Ike: This guy Gene Licker; you weren't kidding when you told me he was a lapper! Ha!
Listen, do my friend Stan Chais a favor and help out. Don't worry about the hours, you're covered.

There's a reason why I'm going to be Time's Person of the Year! And Ruth--if that lunatic Sarah Palin is actually going to do her own talk show, then you and Shana should definitely take that deal with NBC.

BLM

The Closing Bell with Bernie's Buddies

To: Ike
From: Chuck


Ike-
Let me make several points:

1. Thank you again for picking up the check at dinner. Getting our mutual friends tax refunds, even if they weren't bonafide investors in Bernie's firm, is an important step towards re-building the nation's economy.

Considering the fact that actual account holders are getting shafted by Irv's boss over at SIPC, and are being told " its all approved, but call us back in another 2-4 weeks", the least I could do is help out on the IRS issues. If there is any other legislation that I can submit on behalf of mutual friends on Long Island and Boca, please don't hesitate to have someone take me out to dinner.

2. I know that your firm just made some cutbacks, but if Bernie screwed you on the last bill, please don't look to me for a bailout. I still can't believe that I had to give back some of the campaign contributions that Bernie and his family had made over the years!

3. Yes, I have heard from Nan Bongiorno, and she was nice enough to send over some Cannoli from Steve's. That's a great place! Who would have thought they'd have a place down in Boca that made such great Cannoli?

4. Yes, I did see a resume that came across the desk from David Friehling. I'll be happy to pass it along to Tim; as nobody will dispute that we need more capable and better qualified people here in Washington that can make sure Treasury's books are in order.

5. No, I have no control over the web-surfing that might be going on over at the 17th floor. If the FBI thinks its important to interrogate Bernie's Blog every day, well, I guess it must be important use of their time.

6. As far as the JPMorgan question is concerned, I'll have to get back to you on that.

If you see Ruth, send her my love.

Chuck

Monday's Madoff Madness

From: Bernie "Midas" Madoff

First, let me say thanks again to my friends at the SEC.

What? Nobody could figure out why I included a "thank you to my friends at the SEC" within the tombstone on this blog since the very first day that I started rambling last December?

Of course I couldn't know whether Howie E. over at Herrick would actually change his stripes about even taking on a law suit against the SEC, but since he found someone to foot the bill, the documents coming out now make his case "easy peasy" as Mikey Beans would say.

David: Ixnay with the Konigsberg stuff. Crapping your pants isn't going to change anything, and trust me when I tell you that when the Feds say they're going to "make a deal", you can be sure that they're jerking your chain. Its not up to them how long you go away for, its up to the Judge, and since you can't remember how to count past $27 million without my help, your cooperation is worthless.

Another thing: "Dimes" needs you to sign off on his asset statement. Mukasey is trying to convince his judge that he's got plenty of assets that he can pledge as bond, and he needs you to confirm that his portfolio has gained 4% a month for each of the past 10 months. Pauly K. said that he'd be happy to do it, but he wants some more equity in exchange for his services. Everyone's gone goniff-crazy these days!

Next: Why anyone would think that any of the Sonny's would know anything is a joke. Just ask Peter. He'll tell you.

Irv: I'm hearing that you're way off on coming up with an accounting explanation re: why SIPC is calculating Bernie Dollar transfers from one account to another as if they were withdrawals. Crazy!. I'm thinking that you people should be outsourcing to Konigsberg's firm--and his staff is already up to speed. Nan said she's getting bored down in Boca, and now that her Bentley is in the shop, she'd be happy to do some part time hours for you.

I'm having an early dinner with John Rigas and the other boys tonight, but I'll be taking emails later on.